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Frontier Online

September 10, 2000

Frontier -- In Box

Frontier Online

News and advice from our small-business Web site Fee, Fie!

Two employees of the largest U.S. provider of manual day labor, Labor Ready Inc., are suing the company, claiming it unfairly charges workers to cash their paychecks. Labor Ready's 225,000 customers are mostly small businesses.

According to the lawsuit, employees who wish to be paid in cash rather than by check must use a cash machine in the lobby of their Labor Ready office. The machine charges $1 per transaction and keeps any change. The typical day voucher is less than $50, making the average fee of $1.50 equal to about 3% of a day's pay for workers who generally come from the poorest neighborhoods.

Labor Ready says the program's fees are lower than check-cashing companies, and that the fees offset costs of providing the service. But federal filings show the Big Board-traded company actually made a profit from the cash machines of about $4.8 million last year--some 20% of its net income. Quicker SBA Loans

The Small Business Admininstration plans to enlarge its Community Express pilot program, which aims to streamline loan reviews for companies in low-income areas or those owned by minorities, women, or veterans. The program began with nine banks in 20 areas and will eventually include 500 lenders nationwide.

Community Express urges lenders to make loans they might not make on their own. It guarantees 80% of loan amounts under $100,000 and 75% of loan amounts over $100,000. The biggest loan under the program is $250,000.

Since Community Express' June, 1999 launch, its lenders have made 110 loans worth about $11.1 million. Minority-owned firms have gotten about two-thirds of the loans.For the full stories, click Online Extras at frontier.businessweek.comEdited by Kimberly Weisul